Paypal Business Debit Card to Exclude PIN-less Debit

PPBDC Updates

Paypal is sending out an email regarding the Paypal Business Debit Card (PPBDC), with two updates to take affect on February 1st:

• No more cashback on PIN-less debit transactions
• Minimum of $1 cashback earned in a month to get payout

Here is the text of the email, via LeWanch on Reddit:

We want to let you know about changes we are making to our PayPal Business Debit MasterCard® rewards program, in order to be in accordance with the existing PayPal Business Debit MasterCard Cardholder Agreement. Starting February 1, 2016, your cash back rebate payout, if any, will change in accordance with the program’s existing terms and conditions to reflect these adjustments.

As of February 1, 2016:

We’ve updated rewards program disbursements to conform to the existing Cardholder Agreement: We will discontinue paying cash back rebates on PIN-less debit purchases, and we will discontinue paying cash back rebates for any month if the calculated cash back payout is less than $1.00 USD

Serve and Radpad

As many Redditers point out, Serve loads with PPBDC are considered signature transactions and should not be affected by this change.

Similarly, Radpad comes through as a signature purchase as well, and should continue to earn cashback.

PIN-less Debit

Some merchants have the capability of running debit transactions on a different network and are cheaper to process with less fees passed on to the card issue (more details here).

Serve and Radpad apparently processes the debit over typical Visa/Mastercard networks; this runs higher fees and Paypal can justify the 1% cashback for those transactions. PIN-less debit transactions are run through a different system, more similar to EFT bank transfers. Since the fees are so low, they won’t pay the 1% on those transactions. 

Amazon, for example,  by default will charge your debit card as PIN-less debit to save themselves the fees. They allow us to opt-out of this and you may want to do so if your debit card has a rewards program which requires signature transactions.

I imagine Serve is the main PIN-less thing people use the PPBDC for, and there should not be any change to this at all since it comes through as a signature transction. If you have other stuff you do with the PPBDC, it’s worth verifying first if those transactions will still earn cashback after February 1st.